I'm a vice president at RealtyTrac, overseeing public relations, communications and content. I've been with RealtyTrac since 2001, when RealtyTrac was basically five guys operating out of various home offices in Southern California. I now get to be the company's primary media spokesperson and resident go-to expert on foreclosure statistics and trends. I also am managing editor of RealtyTrac's monthly newsletter, the Foreclosure News Report, which is one of my favorite roles here at RealtyTrac because it forces me to interview real estate agents, investors and other experts who are in the trenches in their local housing markets. I graduated from Trinity International University in Chicago with a degree in English Communications.

Survey Says Small-Time Investors Favor Buy and Hold over Flipping

RealtyTrac recently conducted an informal survey of about 100 of our customers who identified themselves as real estate investors and found that the majority are following the conventional wisdom that today’s real estate market is ideal for the buy-and-hold investing strategy — although a substantial number are still flipping.

The survey was originally conducted for an article in RealtyTrac’s award-winning monthly newsletter, the Foreclosure News Report, that looked at the outlook for real estate investing in 2013. The central survey question for the purposes of that article was what outlook these investors have for their local real estate market in 2013.

87 percent of real estate investors have a positive outlook for 2013

Falling in line with many economists and many who play economists on television — myself included —these investors overwhelming said they were optimistic about their local real estate market in 2013. More than 73 percent said they have a “Mostly Positive” outlook, and an additional 13 percent said they have an “Extremely Positive” outlook.

Another interesting finding from the survey can be found in some of the background questions in the survey, specifically one regarding the nature of real estate investments that these investors purchased in 2013. Before getting to the results of that question, however, it’s important to set the stage by taking a quick look at what type of investors responded to the survey.

First, they were primarily veteran investors who have been investing at least as long as the recent boom-bust real estate cycle that peaked in 2006 and bottomed out in 2012. More than 48 percent said they had been investing for more than seven years, while an additional 35 percent said they had been investing between two and seven years.

But although these are relatively experienced investors, they are not necessarily big-time investors. The majority (55 percent) said they had purchased from one to five investment properties in 2012, while only about 5 percent said they purchased more than 20 investment properties in 2012.

So these are mostly what could be described as experienced mom-and-pop investors — not so much the institutional, hedge-fund backed real estate investors that have jumped into the market over the past two years.

Still, these individual investors confirmed the mantra that the institutional investors have been spouting repeatedly: that the current real estate market with its low prices and rising rental rates represents a prime opportunity for purchasing rental properties.

A total of 63 percent of those survey said that buy-and-hold rentals either represented all of their investment purchases in 2012 or at least the majority of their investment purchases in 2012. Still, a healthy 37 percent said that property flips represented either all or at least the majority of their investment purchases in 2012.

This provides some valuable insight for prospective real estate investors who may be thinking about jumping into the market in 2013. While flipping is certainly possible and still a viable strategy in today’s housing market, the preferred strategy for most experienced investors is the more conservative approach of buy and hold.

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